Even though the public mobile radio trunking services (PMRTS) industry continues to hold a lot of potential, the sector did not witness any spectacular growth in FY 2002–03, be it in terms of revenues or number of subscribers. Even on the technology front, the expected movement from analog to digital for the radio trunking phones never materialized. In fact, the only change that took place was the massive market consolidation that left only the Zee Group-promoted ASC Enterprises aka Agrani and the Lalbhai Group-promoted Arya Omnitalk, along with a host of localized players in the fray.

The total PMRTS market grew by 76 percent, while the subscriber base grew by around 67 percent. However, these growth figures were slightly misleading since the base numbers in 2001–02 were pretty insignificant. The total market size grew from Rs 26.3 crore in the previous fiscal to reach Rs 47.3 crore in 2002–03, while the subscriber base increased from 30,450 to touch the 50,000 mark.

Growth Barriers
Lack of clarity in government policies continued to be the main hurdle for the growth of the PMRTS industry in the country.

Most of the PMRTS networks failed to realize their full potential. In the light of this, most DoT license conditions appear to be restrictive and not conducive to the growth of PMRTS for the closed user group (CUG) network. Unless the quantum of PSTN connectivity is increased significantly, it could even mean curtains-down for PMRTS providers. TRAI, in response to a representation from the Mobile Trunked Radio Operators Association (MTROA) has recommended DoT to permit PMRTS providers usage of such interconnections in a month, not exceeding 15 percent of total airtime usage of the network during the previous month. Moreover, since PMRTS is basically CUG-centric, only one-way PSTN connectivity should be allowed. In such a situation, there will be no need for a separate numbering scheme for PMRTS.

However, the main impediment to the growth of the sector in the last fiscal was the prohibitively high license fees fixed by DoT. The current WPC charges (royalty for spectrum plus license fee) amount to Rs 200–300 per subscriber and hence the total license fee payable became 7.4–8.6 percent instead of the 5 percent recommended by TRAI to DoT. Subsequently, customers were being charged around Rs 900 per month, and yet service providers were left with very little margins.

Therefore, in 2002–03, TRAI recommended that the license fee be paid to DoT as well as WPC and the total royalty for spectrum should not exceed 5 percent of the adjusted gross revenue (AGR).

The licensing woes of service providers, however, did not end here. The captive network operators did not pay any license fee in 2002–03, and consequently commercial service providers lost their business. TRAI’s prescription: the licensor should establish a level playing field in this regard and ensure that the captive licensees pay their license fees just like commercial PMRTS operators.

The exorbitant prices of radio trunking handsets also hampered growth. Even the entry level handsets in 2002–03 cost around Rs 18,000. One reason for this was the lack of handset vendors, with only Motorola, Kenwood and EF Johnson being present in the market. Keeping in view the high cost of PMRTS handsets, in 2002–03, TRAI reiterated its earlier recommendations that DoT should exclude the sales proceeds of instruments from the definition of ‘adjusted gross revenue’ especially in case of PMRTS services.

Another sensitive area was the choice of technology for new licenses. In DoT guidelines, it was mentioned that fresh PMRTS licensees should be bound to use only digital technology. This was reflected in the amendment to the existing PMRTS license agreement. Even ASC, which now enjoys more than 60 percent market share and has been on the forefront of a shift to the digital platform, was found to be dithering throughout the FY 2002–03 from taking the plunge. Therefore keeping in view the high investment costs involved in deployment of digital technology and the deteriorating health of the industry last year, TRAI recommended that the choice of technology should be left to service providers.

During 2002–03, TRAI also recommended that the extension of PMRTS to circle level was not advisable. This was because if circle-wise licensing for PMRTS were permitted along with the licenses for providing services along highways as demanded by PMRTS service providers, then this service could provide all-India connectivity and roaming too, which would become competitive with cellular services. 

However, a new type of service area may be defined for PMRT services along the highways. For effective utilization of telecom infrastructure for highway coverage, the PMRTS operator should be free to build infrastructure in a manner that ensures optimum coverage along highways. Towards this end, PMRTS operators should be permitted to use vantage sites within five to seven kilometers from the highway. While such a concession would not mean any serious intrusion in the operational areas of other service providers like BSOs or CMSOs, the additional coverage area may help PMRTS operators improve their weak business case, albeit in a limited manner.

Operator Scenario
On the vendor front, ASC (Agrani) went on an acquisition spree and ended up with a subscriber base of nearly 30,000 and revenues in excess of Rs 25 crore. It acquired Quickcalls India, Bhilwara Telenet, SmartTalk, Procall and Punwire, thereby ending the fiscal with PMRTS licenses for 18 major Indian cities including Mumbai, Delhi, Chennai, Kolkata, Bangalore, Hyderabad, Pune, Surat, Baroda, Gurgaon, Faridabad, Jaipur, Chandigarh, Ludhiana, Jalandhar, Lucknow and Kanpur. It is primarily active among the security agencies, cargo companies, courier service companies, factories and construction sites.

ASC operated mainly under two brands—Smartmobile and Procall. However, in areas where local brand names had stronger recall value, it used them as well. So, for example, Quickcalls continued to exist as a brand in Delhi and Chandigarh while Punwire remained a brand in Punjab. Currently, ASC works on iDen technology, which is proprietary from Motorola.

However, ASC plans to implement digital PMRT networks, with which it expects to substantially increase the size of the market. 

The closest competition to ASC in FY 2002–03 came from the Pune-based Arya Omnitalk from the Lalbhai group. The company grew by 35 percent and generated revenues of Rs 19 crore from its radio trunking operations. Arya is currently active in 11 cities including Mumbai, Delhi, Chennai, Kolkata, Bangalore, Ahmedabad, Baroda, Surat, Indore, and Vizag. It is also launching a Web-enabled radio trunking service, a pilot that was completed by the Indore police last year. Its other clients included BEST, Jet Airways, Mahindra, Metro Rail Delhi, AFCON, and Gammon India. It was particularly strong among security agencies with clients like TOPS, and Brinks Arya, and in the call center industry with customers like Convergys, Msource, and Spectramind. Even a number of municipal corporations were customers of Arya Omnitalk. During the fiscal under consideration, it had a tie-up with the EF Johnson and followed the Logic Trunk Radio (LTR) standard.

Arya Omnitalk also introduced a vehicle tracking Global Positioning System (GPS) in FY 2002–03. The new equipment eased congestion, which was one of the major problems faced by companies. Manual monitoring had been time-consuming and companies, especially those in the call taxi business, found that they were losing business. The new system was particularly effective in Chennai where Arya Omnitalk holds 57 percent market share. 

Barring the big two, rest of the operators got marginalized during the fiscal 2002. These included Mobilkom, from Delhi, which managed to rope in some big corporate customers like NTPC, NDTV, NDMC, Dominos, PowerGrid. However, due to bad market condition and dearth of clients, Mobilkom was forced to close its operations in Mumbai, Bhopal, Chandigarh, and Kolkata. Apart from Delhi, it is now operating only in Shimla and Dhanbad. Telemetry and telecommand are some of the new applications it plans to deploy this year in for power, gas and water utility organizations. It also plans to do on-site automation for mobile machine control, asset location, and environmental monitoring, especially SCADA, besides automatic vehicle location on GSM and CDMA networks.

Other operators like India Satcom and Anco were left operating mainly in the Bangalore region where vehicle units continued to rule the roost.

Rajneesh De